I am very good at self sabotage, and you are right in thinking that it is not just drugs/alcohol/self harm etc. It can be anything.

I find when things are actually going ok in life I self sabotage, because I don’t trust it to last so I try and force a change and feel like I’m in control of my demise rather than my mental illness. Sometimes I’ll quit taking my meds, sometimes I just start staying up stupidly late. I push people away. I isolate. I am very self destructive in a lot of ways, and yeah that’s part of my illness. People don’t understand why I would deliberately try to ruin things for my self, and I totally get that. With a rational mind I can see it’s stupid, but I’m not so good at staying rational.

Perhaps your friend is similar in the way that they do it so they feel more in control. Not getting a loan is out of their control so they then give up on other things for control? Just my opinion of course, and everyone is different, but that’s how it tends to work for me.